Chilean Citizens Will Begin Paying Cryptocurrency Taxes in 2019

Taxpayers in Chile are reportedly going to have to pay taxes on
cryptocurrency earnings this year, as the country’s Internal Revenue
Service (Servicio de Impuestos Internos, SII) has included a section for
cryptoassets in a form that has to be filled on taxpayers’ Annual
Income Tax Returns.

According to local media, last year the country’s government ruled
cryptocurrencies aren’t subject to Value-Added Tax (VAT), as these are
seen as “intangible assets.” Chilean taxpayers will pay taxes on
crypto-related earnings as these will swell up their total income. In
Chile, income taxes are paid annually in April.

Per Diario Bitcoin,
the Chilean government has, for the first time ever, included a section
in its forms for cryptocurrencies, which will be declared as “other own
income and/or third-party income from companies that declare their
effective income.”

The same news outlet details that according to an official letter
signed by the director of the SII, Fernando Barraza, those who trade
cryptocurrencies have to register their operations through “tax-exempt
invoices” so the agency can monitor them. Diario Bitcoin notes that a
cryptocurrency boom within Chile saw the government start monitoring
cryptos, as people are using them as “valid currencies to trade products
and services.”

Although Chileans will have to pay taxes on their cryptocurrency earnings, the legal status of these currencies is still being discussed. Nevertheless, the report adds some see the SII’s move as positive as it “offers legitimacy to cryptocurrencies.”

CriptoNoticias,
another local news outlet, reportedly spoke with tax attorney Patrício
Bravo, a member of a non-government organization called Bitcoin Chile,
that revealed the cryptocurrency community in the country was waiting
for the SII’s input.

He was quoted as saying:

[The SII] has arranged taxation in the broadest possible
way, this is apparently due to two objectives: on one hand expand the
tax structure as much as possible to cover all types of cryptoassets
and, on the other hand, due to the current lack in Chilean legislation
of figures specifically designed for this type of instruments, which
makes it difficult to generate more specific items.

In various legal battles that ensued, initially cryptocurrency exchanges seemed to have been getting the upper hand as the Fourth Chamber of the Court of Appeals of Santiago ruled that state-owned Banco Estado had to reopen accounts. Later on, however, the Third Chamber of the Chilean Supreme Court rejected appeals, siding with the banks.

Nevertheless, cryptocurrency adoption has been growing in the South American nation. Chilean exchange Crypto MKT partnered with an online payments platform to allow 5,000 local merchants to accept cryptocurrencies, while Buda has added Lightning Network support.

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